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The gas turbine market size was USD 13.41 billion in 2020. The global market is expected to grow from USD 13.80 billion in 2021 to USD 17.29 billion in 2028 at a CAGR of 3.3% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with gas turbine witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 19.1% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to the rising demand for gas turbines and growth, returning to pre-pandemic levels once the pandemic is over.
A gas turbine can be defined as a combustion turbine which is a type of continuous and internal combustion engine. It consists of a combustor, an upstream rotating gas compressor, and a downstream turbine on the same shaft as a compressor. There is one more component called turbo fans, that is used mainly to increase efficiency and to convert power into either electric or mechanical form. These turbines are very effective and are replacing the traditional gas-fired or oil-fired power plant with combine cycle power plant using such turbines primarily running on natural gas.
COVID-19 Pandemic to Negatively Affect Power Projects
The coronavirus (COVID-19) has since become a global health threat, affecting more than 200 countries. The power sector is widely affected by the pandemic and the lockdowns imposed by several countries have added to the adverse effect of the pandemic. Due to lockdown, the workforce was not available, the supply chain got immensely disrupted and several power plant projects faced investment issues. Many governments have closed international borders and imposed travel restrictions due to which the machinery, the power generation equipment, and experts required to install equipment were not available. This factor delayed several projects.
As per the U.S. Energy Information Administration (EIA) report for March and April, 2020 the COVID-19 pandemic has caused more delays than average in the commercial operation schedules of the proposed electric generator projects that include natural gas combustion turbines and natural gas combined-cycle plants. The EIA’s Preliminary Monthly Electric Generator Inventory found that 31 natural gas combustion turbine and combined-cycle plants witnessed delays in March 2020 due to Covid-19.
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Growing Aviation Industry and Increasing Consumption of Electricity is a Latest Trend
The demand for electricity is increasing globally and governments are highly focused on decreasing the consumption of fossil fuels as they increase emissions around the world. The governments in several countries are replacing coal-fired steam plants and combined cycle power plants with such turbines. These turbines consume natural gas as their primary fuel. The gas based power produce lesser greenhouse gases.
The aviation industry is expanding rapidly across the world, thereby creating a huge opportunity for this market. Emerging economies focus on improving the aviation industry. Rising investments in the aviation sector is expected to create a growth opportunity for this market.
Increasing Focus on Nuclear and Coal Driven Turbines Replacement by Gas Turbines to Fuel Industry Growth
Coal-based power plants emit large amounts of harmful gases. The emission of such gases contributes largely to heating. The nuclear-driven turbines also generate large amounts of toxic gases which lays long-term harmful effects on the environment. Governments in several countries aim to reduce greenhouse gases and replace nuclear and coal-driven turbines with gas-driven turbines. These turbines usually emit lower toxic gases than coal power plants.
In 2019, around 2,044 GW capacity of coal-fired power plants were operating in the world. By 2021, China is operating around 1,082 coal-fired power plants which largely contributes to increasing air pollution. In February 2021, Junliangcheng Power Plant has added around 650 MW of gas-driven turbine power plant which is a step towards the transition from coal to gas.
Rising Electricity Demand Across the World Augmented Growth in the Market
The electricity demand is widely increasing around the world because of increasing urbanization and infrastructural development worldwide. Industrialization is also increasing across developing countries. In many countries, various smart building, smart cities projects have been initiated which further increases the electricity demand. To fulfill the electricity demand, the public and private sectors are increasing power plant capacity either by installing new power plants or by expanding their power plant capacity. Such projects are majorly installing these turbines as they are efficient and less harmful. Governments have also implemented stringent emission norms, provoking companies to adopt gas-based turbines on a large scale. Thus, this factor is expected to drive the growth in this market during the upcoming years.
Volatility in Natural Gas Prices to Hamper the Gas Turbine Market Growth
Natural gas prices are affected by disruptions in the supply of natural gas. Geopolitical tension is a disruptive factor that causes uncertainty regarding the availability or demand for gas. This can cause higher gas price volatility. The cost of gas within the U.S. has fallen drastically because of shale gas exploitation, but elsewhere within the world, the value remains relatively high. Most of the countries in the Middle East region account for a significant share of natural gas reserves. It is a highly unstable region due to political and cultural issues. Moreover, from the past few months, due to the Covid-19 pandemic, the demand for natural gas decreased significantly. Thus the costs of gas also dropped, which creates a negative impact on market growth.
The 150-300 MW Segment Held the Largest Gas Turbine Market Share Due to High Demand from Power Industry
Based on capacity, the 150-300 MW segment dominated the market in 2020. These capacity turbines are primarily used in the power generation industry. As the focus of the power generation industry has been shifting to reduce harmful gas emissions due to environmental safety awareness. The use of these turbines is increasing in these capacities around the world and thus, this factor shall drive growth in the 150-300 MW segment.
The small capacity industrial turbine segments of 1-2 MW, 2-5 MW, 5-7.5 MW, 7.5-10 MW, 10-15 MW, and 15-20 MW are leading due to the straightforward availability of gas. The small capacity gas-driven turbines with capacity 1-2 MW or 2-5 MW are very useful as they are modular and can operate on two fuels. Such turbines are widely preferred for combined heat & power plants and co-generation plants. Such CHP and co-gen plants are widely installed in residential, commercial, and industrial segments around the world.
Heavy Duty Technology is Estimated to Hold Large Market Share Owing to Rise In Manufacturing Plants
In the technology segment, based on volume, heavy-duty technology held the major share of the global market in 2020. The number of manufacturing plants is growing rapidly along with the integration of large-scale economic zones across developing nations. The expansion of captive generating power stations is increasing across the world due to the rising demand for electricity across the industrial sector. These power stations help in fulfilling electricity demand, which, in turn, shall drive growth in the heavy-duty segment.
Aeroderivative segment is expected to expand at a significant pace during the forecast period. The high availability of highly mobile and flexible technologies drives the growth in the aeroderivative segment. The aeroderivative segment has a diverse application portfolio that includes utility generation, marine propulsion, and district heating.
Combined Cycle Segment Holds Significant Market Share Due to High Demand from Power Plants
Based on the cycle, the combined cycle segment is likely to hold a significant market share in this market in 2020. The growth is mainly attributed to effective waste heat utilization, environmental proximity, and operational efficiency. The demand for such turbines is increasing from the power plants. The combined cycle plants are built in phases, first, the simple cycle plants are constructed and then converted to combined cycle gradually.
The simple cycle segment is likely to foresee growth in this market during the forecast period. The simple cycle plants are cost-effective as compared to combined cycle plants and they are easy to construct and maintain.
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Power Utility Sector is likely to Hold the Highest Market Share Due to Rise in Coal Turbine Replacement Activities
Based on sector, the power utility segment is likely to dominate the global market during the forecast period. The rising focus towards the replacement of conventional steam and coal-fired turbines with these turbines in various power generating stations is growing immensely. These turbines provide high efficiency in power generation as compared to the traditional power generation plants.
The aviation segment is likely to expand at a significant CAGR during the forecast period. The use of this turbine from the aviation segment is increasing rapidly. The aviation sector is growing immensely across the world. The use of such turbines in this sector is more feasible for high-speed requirements.
The oil & gas segment is likely to grow significantly during the forecast period. The demand and consumption of oil & gas are rapidly increasing across the world. Exploration and production activities are increasing immensely around the world. Natural gases are used mostly as a primary fuel in this turbine.
North America Gas Turbine Market, 2020 (USD Billion)
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Geographically, the global market has been examined across five key regions, including North America, Asia Pacific, Europe, the Middle East & Africa, and Latin America. North America held the major share in the global market. This region has a number of gas-driven turbine plants, which are operating mainly on natural gas as shale gas exploration activities in this region are increasing. In 2019, the U.S. Energy Information Administration (EIA) stated that more than 40% of the nation’s power comes from coal whereas nearly 25% from natural gas. By the end of 2019, more than 49 GW of coal plant was retired and around 14 GW boiler converted to burn natural gas and around 15 GW was replaced with natural gas combined cycle. The EIA expects natural gas to become the primary fuel for power generation by 2035.
Asia Pacific region is anticipated to grow at the highest CAGR during the forecast period. Rapid industrialization and urbanization have increased demand for energy, and demand for clean energy technologies such as renewable energy. This region is majorly dependent on coal for power production and coal combustion causes a substantial amount of pollution. The government in this region has taken several steps to lessen carbon emissions which has further increases the use of these turbines in Japan, China, India, Australia, and South Korea.
Europe region is likely to witness significant growth during the forecast period. The European region is extensively working on reducing carbon emissions and for the same, several countries in this region are deciding to phase out coal and nuclear plants from their power generation mix. The focus on gas-driven turbine plants is increasing as these turbines run on natural gas which can be a good alternative to coal. The contribution of natural gas is very low in emission as compared to coal. This drives growth in the Europe region in this market during the forecast period.
Key Participants Are Concentrating On New Contracts to Boost Market Share
This market is extremely uneven with the existence of several large-scale players across the world. These include a group of major companies having a wider geographical presence. Several companies are participating in organic & inorganic developments to solidify their market position across the globe. The companies are focusing on new contracts in order to increase their market share. For instance, in December 2020, Anasoldo Energia announced to sign a contract for the supply of an 80 MW AE64.3 gas turbine and it has been awarded a turbine-related maintenance contract worth approximately 50 million Euro from Synthos. The turbine will be replacing a coal boiler and will be installed in Oswiecim Plant.
In December 2019, Doosan Heavy Industries & Construction (DHIC) along with Korea Western Power Company signed an agreement to supply a gas-driven turbine to the Gimpo Combined Heat & Power (CHP) Plant. The construction of the power plant is scheduled to commence in 2020 and will be completed by 2022.
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The global market research report provides a detailed analysis of the key market and focuses on key aspects such as leading companies and leading capacity, technology, cycle, and sector of the product. Besides this, the report offers insights into the gas turbine market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.
Value (USD Billion) & Volume (MW)
By Capacity, By Technology, By Cycle, By Sector, and By Region
As per Fortune Business Insights, the global market was USD 13.41 billion in 2020
The global market is projected to grow at a CAGR of 3.3% during the forecast period.
The market size of North America stood at 4.43 billion in 2020
Based on sector, the power utility segment is holding the dominant share in the market.
The global market size is anticipated to reach USD 17.29 billion by 2028, growing at a substantial CAGR of 3.3% during the forecast period (2021-2028).
Growing demand for electricity and increasing focus on nuclear and coal-driven turbines replacement by gas turbines are the factors driving the growth of the market
Volatility in natural gas prices impacts the growth of the market.
The major players in the market are GE, Siemens, Mitsubishi Hitachi Power Systems, Ltd., and Kawasaki Heavy Industries, Ltd.
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